Campaigners say Land Reform Bill just the start of a journey towards "democratisation" of Scotland's land

The Scottish Government held a 10-week consultation on land reform before publishing the Bill

LAND reform campaigners have welcomed the publication of the Scottish Government's Land Reform (Scotland) Bill, but warned that it must be seen as just a first step towards the "democratisation" of land in Scotland.

Scotland has the most concentrated land ownership in Europe, with half of the land owned by 432 people.

The new Bill will end tax relief for shooting estates and force owners to sell the land if they are blocking economic development.

Money raised from ending the tax exemption will be used to boost the community land fund from PS3m to PS10m a year by 2016.

A land register will also be created so that information about land ownership can be made available in the public domain, as well as a Scottish Land Commission to ensure the issue is given a permanent footing in Scottish politics.

"There is a wide sweep of things happening with the land reform agenda and people shouldn't make the mistake of thinking that just because this is the Land Reform Bill this is it." Andy Wightman

Andy Wightman, author of 'Who Owns Scotland' and 'The poor had no lawyers', told CommonSpace that he was "very encouraged that there is a land reform bill on the table kick starts the process", but insisted that it should be seen as just a "small part of a process".

"In many ways there is more change in the Community Empowerment Bill to land issues than in this Bill. There is going to be a Bill on inheritance coming up that will be important to. The point is there is a wide sweep of things happening with the land reform agenda and people shouldn't make the mistake of thinking that just because this is the Land Reform Bill this is it," he explained.

He added that the decision to create a Scottish land commission as part of the Bill would ensure the issue "will stay on the agenda".

A spokesperson for the Scottish Land Action Movement (Slam), a campaign group for radical land reform, told CommonSpace that the Bill was a "welcome move towards a fairer Scotland".

"The establishment of a Land Commission to deal with land reform issues as they arise, and the re-instatement of business rates for sporting estates are progressive, if long overdue, steps," the spokeperson said.

"Land prices and inequitable ownership lie at the root of the housing crisis, causing young people to leave Scotland and rural areas to depopulate." Scottish Land Action Movement

The Slam spokesperson added that the Bill had to be seen as "only one stage in the long process of democratisation of our markedly unequal country".

"It should be remembered that the land reform agenda is about bringing Scotland forwards into the 21st century, about modernising structures rather than focusing on individuals.

"Land prices and inequitable ownership lie at the root of the housing crisis, causing young people to leave Scotland and rural areas to depopulate. We hope the Scottish Government is serious about tackling these issues, and welcome this Bill as just the beginning of a process of radical change."

The Bill came after a 10-week consultation on land reform, and one of the groups that submitted a document to the consultation was the Common Weal, whose policy unit director, Peter McColl, said the issue was "absolutely fundamental to creating a Common Weal Scotland".

"It is not just a rural issue, it is an issue where radical action could transform the lives of many Scots," he explained.

"The chronically unequal distribution of land restricts our ability to create stronger communities and a better physical environment. Where we have had land reform we have seen the creation of near-Utopian communities, that are both innovative and deal with many of the fundamental problems we face as a country."

McColl agreed with Slam that the Bill had to be seen as the start of a "journey" to radical land reform.

"We need to redistribute rural land and strengthen the right of urban communities to their land. The Scottish Government has started this journey today, but we need to get to the conclusion as quickly as we can," he said.

"Where we have had land reform we have seen the creation of near-Utopian communities, that are both innovative and deal with many of the fundamental problems we face as a country." Peter McColl

Green MSP Alison Johnstone said that the Bill would allow the Scottish Government to "begin to address some of the deepest problems of land ownership in Scotland", but warned against the idea that it was "job done".

She added: "Last year's report by the independent Land Reform Review Group recommended that a Land Value Tax be given serious consideration and that there be an upper limit on the total amount of land in Scotland that can be held by a private land owner.

"I would urge ministers to reconsider these ideas, so we can pursue a truly bold land reform agenda."

Nicola Sturgeon set out the plans for "radical" land reform shortly after becoming party leader and first minister in November last year, saying at the time that "Scotland's land must be an asset that benefits the many, not the few".

"These proposals would lead to greater government interference in land ownership and an increase in the tax burden on rural businesses." Murdo Fraser MSP

The Land Reform Minister, Dr Aileen McLeod, said in announcing the Bill that "we cannot underestimate the crucial part land reform will play in contributing to the future success of communities across Scotland".

"Through the Land Reform Bill we want to ensure that future generations have access to land required to promote business and economic growth and to provide access to good quality, affordable food, energy and housing," she said

McLeod added that the message to landowners "is clear": "It is no longer acceptable to own land in Scotland and not take the public responsibilities that come with that ownership seriously."

The Bill was not welcomed by everyone, however, with Scottish Conservative Mid Scotland and Fife MSP Murdo Fraser saying that it was evidence of how "out of touch" the Scottish Government is with "the priorities of rural communities".

He added: "These proposals would lead to greater government interference in land ownership and an increase in the tax burden on rural businesses.

"The Scottish Government has been warned that this will cost jobs, but has ignored those warnings."

Comments

KW

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

KW

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

KW

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.

Scottish Scientist

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

Scottish Scientist

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

Derek Louden

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

Derek Louden

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

Derek Louden

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

Derek Louden

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

Derek Louden

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.

pictishbeastie

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

pictishbeastie

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

pictishbeastie

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

pictishbeastie

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

pictishbeastie

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.

Robin Barclay

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

Robin Barclay

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

Robin Barclay

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

Robin Barclay

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

Robin Barclay

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.

markryle

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

markryle

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

markryle

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

markryle

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

markryle

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.

Karen Dietz

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

Karen Dietz

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

Karen Dietz

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

Karen Dietz

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

Karen Dietz

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.

Roisin Murphy

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

Roisin Murphy

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

Roisin Murphy

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

Roisin Murphy

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

Roisin Murphy

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.

William Steele

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

William Steele

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

William Steele

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

William Steele

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

William Steele

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.

Steve West

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

Steve West

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

Steve West

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

Steve West

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

Steve West

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.

DAVID SMART

Tue, 06/23/2015 - 20:44

I was very disappointed by the coverage of the land reform bill on radio Scotland today. Their reports focussed upon the proposal for 'a sustainable development test for land governance' and 'removal of the exemption from business rates for sporting estates'. These proposals were painted as being very interventionist and damaging to rural economies. There was no mention of the other proposals within the bill or that the government sees this this bill as part of a long term strategy to make landownership in Scotland more socially just. I am pleased to read Common Weal's balanced coverage as it steers away from the usual caricatures rolled out by the BBC and makes it clear that land reform is not just a rural issue. The pattern of landownership and the manner in which land is traded as an asset has huge social and economic consequences for the whole of society. I hope the Scottish electorate engages with this issue and related issues such as the community empowerment bill and the ongoing consultation on local taxation reform.

DAVID SMART

Wed, 06/24/2015 - 23:26

THE FIXED-RATE AREA LAND TAX (FRALT)
- why the FRALT would encourage more investment in land than the Land Value Tax (LVT)

The value of a plot of land does increase depending on whether the land is drained, cleared of rubble or waste, levelled off, whether a public or private road, or water or power-supply is built nearby, what else is built in the neighbourhood, whether a test-bore discovers something valuable in the ground, and other investments short of building a property on top of the land in question.

Land has value according to what someone will pay for it and that's a very variable amount. Also once something has been built on land, the value of the land cannot be long distinguished with the value of the improved land including the property built upon it because neither can be bought or sold without the other.

So a Land Value Tax is complex and it requires a whole army of tax assessors to pontificate about what "the value of land plot 142353" is etc.

The beauty of the Fixed-Rate Area Land Tax is its simplicity, reliability and fairness to investors who never get hammered with more tax because they've done the right thing and invested in the land.

If the Fixed-Rate Area Land Tax is administered as a local authority or council tax (which I support) then each council would be free to set their own FRALT.

So Highland Council, setting the FRALT for its population density of 9 persons/sq-km would most likely set a lower rate than East Lothian Council with a population density of 144 persons/sq-km.

So for example, Highland may set a FRALT of PS0.50/month/1,000sq-m but East Lothian might set a FRALT of PS8/month/1,000sq-m.

It is a design feature of the Fixed-Rate Area Land Tax that the lowest value land will not, at present, sustain the level of taxation implied even by a local-council FRALT and so holding on to such land would be a loss-maker for the land-owner. It is precisely this loss which is intended to encourage the landowner to sell up his lowest value land to someone else who may have a new idea for how to make money on it.

The Fixed-Rate Area Land Tax provides an incentive for those land-owners, who do not know exactly how to make enough money on land they own to be able to afford to pay the FRALT, to sell their land to someone who does know exactly.

If the FRALT is not paid on a plot of land, the tax collecting authority will exist to seize ownership of that plot of land in lieu of payment of the due tax upon it and have a right to auction the land off to extract whatever value the land is worth.

If the previous landowner cannot even make an offer for the land at auction himself then what was it worth to him or her, in the first place? Nothing, he or she was just hogging it because he or she could.

THE FIXED-RATE AREA LAND TAX (FRALT)
- for best use of Scotland's land.

DAVID SMART

Wed, 06/24/2015 - 23:29

Underwhelmed by the start of a journey to the "democratisation" of Scotland's land - better than nothing but not as good as a Fixed-Rate Area Land Tax (FRALT) which would tax the land owner in direct proportion to the area of land - huge estate, huge tax.

No soft "end tax relief for shooting estates and force owners to sell the land if they are blocking economic development" mercy for the land-hogging estate landowners! Tax them until the pips squeak with a heavy-duty FRALT.

When it's land reform you need, reach for FRALT - the land tax that big estate landowners fear!

DAVID SMART

Fri, 06/26/2015 - 06:51

I agree that the start of the land reform journey has been a little underwhelming. I have been disappointed by the quantity and quality of some of the media coverage. Radio Scotland and The Herald's coverage could have been written by the Telegraph. I thought The National's coverage was high profile and positive but they continue to treat this as a rural issue and infuse their pages with images of tweedy gentlemen with guns and misty mountains. I hope Commonspace will address this by engaging with land reform as an on going process that affects everyone with multiple socioeconomic, environmental and cultural consequences.
I will have to read up on FRALT - I have only just got my head around LVT. I take your point Scottish Scientist about land taxation as a mechanism of discouraging the ownership of large blocks of land. I think there will also be changes to inheritance law so that may have a similar effect. I think I am more interested in land taxation from an socio-economic point of view. I think the way in which land is owned in the UK and the taxation regime (or lack thereof) contributed directly to the economic crisis of 2008 which has led us down the path of austerity politics. The housing bubble burst (houses are built on LAND) and this has had a catastrophic effect on society. If we were to tax land perhaps this would discourage property/land speculation and prevent further economic disaster. I also think land taxation should be explored as a possible route out of austerity. There is huge, untapped wealth squirreled away in land/property ownership. Forget mansion taxes and the 50p rate of tax - that is just political posturing. If we genuinely want to redistribute wealth, or at least make the wealthy contribute fairly we must tax land. Holyrood is about to be manoeuvred into a position where it must either acquiesce and accept austerity (and cut public services further) or raise more money from elsewhere. There is also a black hole in local authority budgets. Without getting too party-political, as FFA is now a pipe dream, stimulating economic growth in Scotland may be difficult so this will not generate more income. We cannot borrow either. The only solution will be to raise tax - this is where Westminster wants to put the SNP. Perhaps the alternative is tax reform. There is currently a consultation about changes to local taxation. Land taxation is one of the options being considered. http://localtaxcommission.scot/tell-us-what-you-think/
Perhaps local land taxation could raise the money needed to fund Scotland's commitment to public services in a socially just manner. I think for land taxation to be possible we would need land reform as we would need to create a register of who owns Scotland so we know who to send the bill to! This proposal was dropped from the current land reform bill. In my opinion land reform, taxation, social justice and austerity are all related. I am going to an anti-austerity event on Sunday - I wonder how many people will be demanding land reform?

DAVID SMART

Sat, 06/27/2015 - 10:46

This suggests to me that the SRIT is a bit of a straightjacket. Scotland won't have powers to vary bands of income tax. So a rise in SIRT (which might be needed to fund public services) would disadvantage lower income earners as they would pay a larger % of their wage in tax. The only way to advantage lower income earners is to reduce SIRT - this sounds like Osbourne economics to me. I think the SIRT will have to stay where it is and we will have to increase taxation income by replacing the Council tax with a land based tax.